My financial journey so far

The journey has had some pretty cool views along the way (credit)

I’ll be entirely honest, I wasn’t sure if I would ever be doing a ‘numbers’ post. But having seen how freely some other bloggers share their numbers (such as weenie at Quietly Saving, Saving Ninja, The FIRE Starter and Fire V London) and having learnt some things I never knew about before from their stories (matched betting and margin loans for example), I figured it wouldn’t be the worst thing in the world to share some figures and endure the intense scrutiny of the FIRE crowd. I think I run a pretty tight ship, but I have lately been seduced by the dark side – I’ve bought a couple of expensive items, therefore torpedoing my chances of an 80% savings rate this year. Oops.

Ever since about 2015 I’ve developed a habit of on the last day of each month, grab all the figures for my various accounts, investments, mortgages and credit cards (but not pensions, because I’m an idiot – we’ll get to that later) and update my ever growing spreadsheet. So from that point onward I have pretty accurate data on my net worth. Before that though, I’m going off some random bits of memory, some rough guesses and some older spreadsheets I found that relate to my household outgoings, so bear with me on the early parts!

For a brief introduction, you can refer back to my previous post of when I got my first job.

The Early Years (pre-2007)

End Net Worth: ~£1,000.

I started working when I was 16 and still at school doing a 8-9 hour shift every Saturday at the local fast food restaurant where I was paid about £35 a day (and got a free lunch out of it!). Not exactly astounding money but it did help me take my girlfriend at the time out to the movies and shopping! I continued to work there during my college years and I’m pretty sure by age 18 I had roughly £1,000 to my name which isn’t bad!

The Uni Years (2007 – 2010)

End Net Worth: ~-£10,000 (with £3,000 savings, student loan outstanding)

I was extremely fortunate when I left University not to have massive debts. The number one reason was back when I went University tuition fees were capped at £3,300 a year. The second reason was I got a grant for the first two years which halved my fees! I did a three year Bachelor’s in Computer Science, plus I had to pay rent in the grotty houses surrounding the University (I shared with 5 other guys). I continued to work at the fast food restaurant during the holidays (Summer, Easter, Christmas) and remember for the first time wondering what the hell this “Income Tax” was that appeared on my payslip(!).

I can’t remember exactly what I was earning but it wasn’t much even after I got a “promotion” to training the other guys how to make the food. I think I had about £3,000 in savings but my student debts were much bigger as I mainly used my money for fun times and didn’t even think about the loans that much.

Failing to find a job (~2010/11)

End Net Worth: ~-£4,000 (with £9,000 savings, student loan outstanding)

As detailed in my last story post, I graduated from University and then… failed to get a job in my chosen field. The Great Recession of 2008 had occurred a couple of years previously and it seems there was a massive over-supply of graduates trying to get a job. I remember going into an interview at IBM where they had 8 graduate positions available and the room was packed with about 200 people! And these were the ones who had gotten past the first two interview steps! I ended up doing nearly a full year at the fast food restaurant, interviewing for jobs in between shifts and also covering any shift I could get my hands on.

I was, of course, at this point still living at home with my parents. And while I love them dearly, going from complete freedom at Uni for three years back under parental rule was really starting to annoy me. On the upside, I only paid £200 a month rent and got lunch most days for free at work, so I had basically zero outgoings which was nice. I think I made about £8,000 from my job that year, minus the £2,400 I paid my parents for rent.

My first job (2011)

Start Net Worth: ~-£15,000 (with £3,000 savings, car loan, student loan outstanding)
End Net Worth: ~£0 (with £18,000 savings, car loan outstanding)

By some small miracle I actually got hired into a graduate scheme at an IT company! I joined as a “consultant”, which basically meant I travelled up and down the country building and supporting systems. This meant I needed a car. Cue me (in my stupidity of youth), spending nearly £11,000 on a 1 year old Ford Fiesta that looked very sporty but only had a dinky 1.4L engine. I did not have £11,000 to my name so… I borrowed about £5,000 and put down a deposit of £6,000 of my own money. Turns out that financing was quite pricey, but hey I was young and stupid, okay! In my (slight) defence I was still driving that car until late 2019!

My starting salary was £25,000 (I still remember being in the car when I got the call that I’d gotten the job. When they said the salary, I was “in a daze for days” according to my Mum). I was still living at home but due to me being away Monday – Friday for work this wasn’t such a bad problem as before! I think I just about broke even on net worth this year. I had started paying down my remaining student loans (and stupidly didn’t pay down the car loan).

Saving up to buy a flat (2012/13)

End Net Worth: ~£25,000 (no student loan, car loan outstanding)

I don’t remember exactly when but I got promoted to the next level and my salary got bumped up to £30,000, so I think I had just under £2,000 coming in a month. I joined the pension scheme at work, where the employer contributed 10% if I put in 2.5%! I put in the bare minimum (d’oh). I started hunting for a flat in early 2013 and had saved up about £20,000 as a deposit (I always keep a bit of cash in reserve as a buffer).

When I found a lovely flat in an area I liked, I went to the banks to get a mortgage. Turns out they were willing to lend a 23 year old guy £150,000…! That was 5x my salary if you’re keeping score. That actually scared the crap out of me. I am very debt adverse as a rule. Oh, and I still had a year left on my car loan, but to get the mortgage I was required to pay it off, argh! I had to throw my savings buffer at the car and at all the related fees that come with buying a property.

Home (flat) ownership! (mid 2013 – mid 2015)

It was a nice flat, but not this nice! (credit)

Start Net Worth: -£130,000 (no car loan, £20k equity, £150k mortgage)
End Net Worth: -£33,350 (£92k equity, £138k mortgage, £12k cash, £5k credit cards)

I had just gotten debt free and then I got a huge mortgage. Oops. According to my spreadsheet of the time I was paying the following major costs a month:

  • Mortgage: £627
  • Council Tax: £85
  • Utilities: £66
  • Fuel: £50 (work covered most of it though)
  • Food: £100

My salary had grown to around £36,000 though which was nice. I also discovered that the bank I took the mortgage from allowed you to overpay by £500 a month with no penalty. I had yet to discover investing, Monevator or the FIRE movement then, else I might have put my money into some global trackers and reaped the rewards! Ah well.

Instead I over paid my mortgage by ~£5,000 a year and brought that crazy 5x salary multiple down to a much more reasonable number. I remember sleeping better when it dipped under 4x salary. My flat also jumped up in value apparently, as I started tracking my end-of-month numbers and I have the equity value as £92k! Also, amazingly, I think I was achieving about a 50% savings rate back then. Win!


A note about Net Worth and my spreadsheet

From this point onwards, around August 2015, my spreadsheet started recording the values of various assets and debts on an end-of-month basis, so the numbers should be pretty accurate from here on out. I calculate Net Worth as:

Total of all assets (except pension) minus all debts = Net Worth value

Why don’t I include pensions? Because I never thought to actually keep track of the them until the beginning of 2019… argh! Stupid boy. I probably figured they weren’t worth thinking about until I was much older. I did start taking notice in 2018 but still didn’t track them, and I have no idea what was in them before then, so you’ll see a big spike starting 2019. Anyway…

Assets include: cash, equity, ISAs, pensions (after 2018), never my car
Debts include: credit cards (even if they’re work expenses), loans, mortgages

A history of my net worth from August 2015 – January 2020 so far – orange is the addition of pensions to the net worth calculations (click to enlarge)

Starting to track things (mid-2015 – 2016)

End of 2015 Net Worth: -£29,500 (£93k equity, £136k mortgage)

I continued to work hard at my job and was up to about £38k salary. Not factored in my spreadsheet are the various bonuses I received twice a year – I don’t think they were massive sums or anything but they would have been chucked at the mortgage or saved in cash back then.

The year of the job change (2016)

End of 2016 Net Worth: £13,000 (£110k equity, £119k mortgage, £11k S&S ISA)

I had by now been at my job for nearly 5 years and was looking for a change. I was getting a little bored of being stuck on the same client for over a year and the prospects of getting a new one seemed slim – I had a very niche skill set at the company and they refused to let me train up anyone else in what I did. I hunted around for a new job.

I eventually landed a job with a massive salary increase to £63,000(!). I was apparently being underpaid at my old job and never realised it! With my (pre-tax) salary bump of 65%(!) I was set to really super charge my savings rate! My spreadsheet shows that my outgoings had actually dropped quite a bit for my flat, as all those mortgage over payments meant I qualified for lower rates as well. Expenses a month were:

  • Mortgage: £493
  • Council Tax: £92
  • Utilities: £77
  • Fuel: £100 (work still covered most of this)
  • Food: £125

I had also finally discovered investing and started building up a Stocks & Shares ISA, slowly drip feeding in about £1k a month to test the waters. My new employer offered a 5% match on their pension and I started contributing 15% of my salary into it (the max allowed at the time). My spreadsheet shows a 76% savings rate for 2016!

An engagement, a house, a TV and a cat (2017)

End of 2017 Net Worth: £36,500 (£165k equity, £196k mortgage, £33k ISA)

I asked my girlfriend of the past few years to marry me and she said yes! We both ended up selling our flats (mine in a commuter town in the south east, hers in London) and bought our current home in a leafy suburb of London. I stayed with my parents for a couple of months while the purchase went through, which is why my net worth sky rocketed for a couple of months then drops to nearly nothing on the above chart. This year I also achieved a raise and my salary grew to about £68,000, after helping deliver a particular gruelling project which was on fire for most of the year…

From this point on, we shared all household costs between us 50/50 but the below numbers are the half I paid. The numbers are a bit higher than when I was living in my flat:

  • Mortgage: £745
  • Council Tax: £83
  • Utilities: £50
  • Fuel: £100 (work still covered most of this)
  • Food: £100
  • TV Loan: £150 (bah – it was 0% interest at least)

I splurged out on a shiny new 4K OLED TV which is still awesome for cinema nights, but it was a really stupid purchase… sigh. We also adopted a cat from a shelter as it was one of my wife’s dreams to have one – she is adorable and a pain in the butt (the cat, not the wife).

Ploughing on, a wedding and a honeymoon (2018)

You only get one honeymoon, make it a good one! (credit)

End of 2018 Net Worth: £87,800 (£192k equity, £170k mortgage, £50k ISA)

I got married! Woo! With my wife and I’s combined salary we started overpaying the mortgage as much as possible while filling up our ISAs to the £20k limit each year. We then spent the winter in Hawaii exploring the islands and generally having a good time! My salary rose quite a bit this year as well due to good project performance.

Oh, and I finally got my beloved solar panels installed at the end of the year!

Crushing the mortgage and tracking pensions (2019)

2019 Net Worth: £210,000 (£212k equity, £150k mortgage, £53k ISA, £109k pensions)

I finally started tracking my pensions, which account for about half my net worth. Excluding them, my net worth still increased by about £12k, but this was mainly due to throwing a crap load of money at the mortgage to get it down to a reasonable level. My salary again rose due to “exceeding expectations”. I also received a large bonus which was 100% put into my pension (lest I be tempted to spend it). You’ll also notice there is a significant dip around September 2019 – I sold a chunk of my ISA and got a loan to buy the car of my dreams; a Tesla Model 3. It was worth every penny.

I achieved roughly a 77% saving rate in 2018 – but that’s excluding the car purchase, which came from a mixture of savings and a loan. I upped my pension contributions to 20% and they grew almost £35k with contributions and a surge of stock market growth, so it wasn’t all bad. I plan to do a ‘year in review’ at some point to dive into more details on where my spending went and what I managed to save last year.

In summary

Looking back through the years and the numbers, I can see there’s been some lifestyle inflation going on, but that seems mainly to be linked to moving from my small flat to a much bigger house in London. The mortgage is by far my biggest outgoing. We’ve cleared nearly a third of it in the past two years and it’s still bloody huge. Housing in London is ridiculous.

I certainly had some good luck with getting on my graduate program all those years ago, but I’d like to think I returned their chance on me with many years of hard work, late nights and (paid) weekend work. If you deliver what you say you will, when you said you would, people start to notice and will reward you for it.

Excluding the mortgage (and soon to be gone car loan), my annual expenditure on day to day living is a pretty measly £5k a year(!). It definitely helps I get my transport and meals covered by my job most of the week but even at the weekend I don’t really do expensive things. I’m far happier sitting in a pub with my friends and playing board games, or just wandering around town and grabbing a coffee with my wife than anything else.

A good life does not need to be expensive!


TSHE: Solar Panels + 1 year review

Too many of these really messes with your solar panel figures! (credit)

The year 2019 is over and I have received the official numbers on the scoreboard for the first year of The Solar House Experiment (TSHE). Just in case you haven’t read the previous overview post, I installed a 3.6 kW solar array on my house in November 2018. There were then a few additions to the system over the year:

  • April 2019 – I installed a solar diverter that takes excess solar energy and dumps this into our hot water tank, providing ‘free’ hot water
  • September 2019 – I bought an electric car after my poor old Ford Fiesta died rather spectacularly after 9 years of reliable service
  • Late November 2019 – a shiny new 7.7 kW EV charger was installed which has the ability to dump excess solar power into the car, or charge the car rapidly overnight

The total cost for my installed solar panels was £7,566. This included parts and labour, but I went and fished out the original invoice to show how much exactly the panels, inverters and monitoring software individually cost and what the labour charge was. Please free feel to use this as a comparison if you decide to get your own panels installed in the future!

Solar panel choices and micro-inverters

Solar Panel choice: Panasonic 330W HIT N330
Price per Panel: ~£225 (including 5% VAT)
Total for 11 Panels: £2,478

Due to space constraints on our house, I went for the Panasonic 330W panels. At the time of purchase they were one of the highest wattage panels in the ‘normal’ panel size. With a claimed efficiency of >19% they were also some of the most efficient, though I imagine the panel technology has gotten even better since 2018. For reference, your ‘average’ mass produced panel was closer to 265W and 15% efficiency.


Micro-Inverter choice: Enphase IQ 7+ Micro Inverter
Cost per Micro-Inverter: £105 (including 5% VAT)
Total for 11 Micro-Inverters: £1,155

There are generally two types of inverters used with solar panels: string and micro. String inverters can connect multiple panels at once and are thus cheaper, however, their drawback is that they can only convert power equal to the worst performing panel in the string. If one of your, say, eight panels has a shading issue, then the rest of the panels in the array could only output the same amount of power as that shaded panel.
Micro-inverters are attached in a 1:1 ratio (one inverter per panel). This allows each panel to produce the absolute maximum possible and feed it into your home/the grid. I had additional reasons to get these as I have 11 panels and some of them are at different angles on the roofs, meaning I’d get sub-par performance otherwise. An additional benefit is I can see the production of solar on a per-panel basis with the monitoring software!


Monitoring Software: Enphase Envoy Enlighten
Cost: £300

This little box sits near your electric fuse box and has a couple of CT clamps attached to it that measure the energy following in from the panels and the input/output of power from and to the grid. The software works very well with the micro-inverters (same company) and provides insights and useful statistical data, some of which I’ll be discussing later in this post! At £300 it’s not cheap but does make sure everything is running smoothly in your system and allows for remote troubleshooting if necessary (which you can disable if you wish / have privacy concerns).


The remaining costs were for some mounting kits to the roof (~£400), an additional fuse box and wiring for my garage (~£200) and labour/setup costs of about £2,800. The company who did my installation weren’t the cheapest but they were the friendliest and answered every question I had with detailed replies – which was a great learning experience for me!

The solar year in review

First let’s look at the yearly graph to see how much solar was generated and consumed:

A summary of solar panel production and house energy consumption for 2019. Blue is production and orange is overall household energy consumption.

There’s quite a bit to unpack from this screenshot and there’s a couple of errors I need to point out as some of the values are slightly off:

  • May 2019 – the CT clamp measuring the power flowing in/out of the house was switched accidentally by my Dad and myself when we were installing the solar diverter and we didn’t catch it till the end of May. My energy bills from May are not much different from April or June, so ignore this.
  • June 2019 – my panels were producing so much solar power, they kept shutting themselves off during peak periods due to overheating. The company who installed the panels very graciously upgraded all the micro-inverters for free and didn’t charge for parts or labour. As you can see in July, they fixed the issue! This does mean my panels didn’t generate about an additional ~200 kW by my reckoning though.
  • September 2019 – The power consumption spikes up massively because I bought an electric car and, on a day I charge it, it easily adds on 30 kW to our daily consumption.

Solar Stats Breakdown

MonthSolar Gen.
(kWh)
House Usage
(kWh)
Exported
(kWh)
Used Solar
(kWh)
Solar Used
(%)
JAN82.6789.3173.239.4411.42
FEB161.4277.81131.2630.1618.68
MAR195.1789.49147.2447.9324.56
APR250.9573.16169.5881.3732.42
MAY277.9490.00*150.00*202.3446.03
JUN248.8073.6791.05157.7563.40
JUL459.4451.65238.81220.6348.02
AUG423.6858.75235.97187.7144.30
SEP322.3091.36136.51185.7957.65
OCT162.61139.3862.8499.7761.36
NOV91.55226.1516.4775.0882.01
DEC79.02345.968.0271.0089.85
Total:2,755.551,406.691,460.981,294.5746.98
Monthly usage stats from the solar panels and house consumption.
* denotes estimated values.

So as you can see above, the panels produced 2.75 MEGA Watts (2,755 kW) of carbon-free power to the house and national grid as a whole. Not bad for a first year! With the kinks ironed out now, I think it’s possible they’ll do 3 Mega Watts in 2020! In terms of saving us money on our electricity bills, we’ll get to that in a minute. First let’s compare our 2018 and 2019 usage (removing the electric car for the moment).

House Usage 2018 (kWh)House Usage 2019 (kWh)Electricity Usage DIFF. (kWh)Electricity Usage DIFF. (%)
1586965*62139.2%
House electricity consumption years compared.
* denotes that the 2019 figures are excluding the electric car charging, which is quite substantial!

To put that another way, on our normal day to day energy usage, we are using nearly 40% less electricity to power our home a year. Though interestingly, we are only making use of about ~22.5% of the solar power produced to do this. How was the other ~24% of solar power consumed then?

The solar diverter to the rescue

Photo from 9th January 2020 – last year’s total was (682 – 9) = 673 kWh of solar power used!

As you can see from the above photo, the solar diverter (MyEnergi Eddi) device helped drastically boost the solar usage from the house by using 673 kW of solar power. By taking excess energy from the panels when there’s no other electrical loads in the house, we get to enjoy ‘free’ hot water, especially during the summer months. We were able to turn the gas boiler off completely for a while!

As the solar diverter was not installed until late April, there is a chance we might be able to get to 1 Mega Watt (1,000 kW) of hot water heated next year! Last year’s 673 kW of solar energy currently equates to 136.6 kg of co2 not released due to burning natural gas! Fantastic!

Thoughts on solar consumption

I was very unsure how much of the solar power produced we would be able to use on a day to day basis. Our main problem is that when the solar panels are at their most powerful, in the middle of the day, my wife and I are generally at work so we can’t make the best use of the power. The incredibly obvious solution is to get a solar battery but these are very very expensive and currently the payback period is way too long to justify one. At just under £400, the MyEnergi Eddi is an excellent addition to The Solar House Experiment as it allows for the power to be used regardless of who is in the house or what is happening in it. It is completely fit and forget.

That isn’t to say we didn’t make efforts to do things such as use the washing machine, dish washer and oven during peak solar periods where possible but this is not always practical. It was interesting to note that when working from home that the panels, even in winter, would generally power all the computers and equipment I use for my work which was cool!

With the addition of the electric car and its huge battery and my new EV charger (MyEnergi Zappi) I will hopefully be able to increase that solar usage number even further, especially during the summer months. The best solar generation was in July when the panels produced 22 kW of power in one day(!) Our house uses about 3-4 kW on an average day so that is frankly an insane amount of power to use up! That amount would let me add nearly 90 miles of driving range a day to my car, for free!

The money side of things

Finally, let’s discuss what has been the payback on the panels and solar diverter and how long will it take for them to pay for themselves. First, note that the solar diverter is replacing much cheaper natural gas with solar generated electricity, so it’s cost savings are less than they might first appear. For comparison, my unit rates for each are:

Price Per kWh (GAS)Price per kWh (Electricity)
3.51p*
*(4.13p assuming 85% efficient gas boiler)
13.80p
Current rates for electricity and gas on my tariff

So with no further ado, let’s breakdown the returns from the panels:

Solar ComponentCalculationMoney Earned/Savedco2 Saved (KG)
Feed In Tariffs2755 kW x 6.68p£184.04851.30
Solar Consumption
(House)
621 kW (E) x 14.80p£85.70191.89*
Solar Consumption
(Hot Water)
673 kW (G) x 4.13p£27.80136.60*
Total:£297.54851.30
Breaking down the money saved via the solar panels and solar diverter.
* We cannot double count the generation and consumption, but I’ve provided them as separate numbers

With a total install price of £7,931 (panels + solar diverter), this is equivalent to a yearly return of 3.75%.

This is a little on the low side of what I expected. I was aiming for about a 4.5% return. The missing June solar generation would have been an additional ~£13 of Feed In Tariff payments and I’ve only had the solar diverter installed for two-thirds of the year, so those numbers will definitely improve in 2020. At the current rate of return, I am therefore on track to breaking even in Year 19. I will be doing everything in my power to bring that down to Year 12!

The major difference in 2020 will be that I’m fuelling my electric car with solar power! As you saw above, over half of my solar power is being exported out to the grid at the moment – with the car battery able to soak up loads more of this electricity, I should be able to raise the solar consumption much higher and boost the returns as well. If I’m able to get to a 6% return each year then it will only take the 12 years I want for the payback period.

God I wish solar batteries were cheaper though, it would make everything so much easier!

In summary

I hope this has been an insightful look into installing your own solar array on your house and what the possible payback will look like. The ‘problem’, if you like, with our house is that it is already super efficient and we were already using well below the average electricity usage for a typical household of our size (roughly 120m squared). Like I said previously, on an average day we use between 3-4 kWh, whereas I believe the UK average is closer to 4,800 kWh(!).

People with larger houses (and therefore roofs) can install more panels than we can and can use the much cheaper, if slightly less efficient, versions and make their money back quicker. But we didn’t install all this purely for the financial side of things – we are choosing to use our money to reduce the carbon impact of our home as much as we can. I actually have an upcoming post on how even a small number of panels and a small 2-3 kW battery could drastically reduce your carbon impact, so stay tuned for that.

And with that, we’re done! Please feel free to share with anyone who has questions about getting their own solar panels installed!


Electric Mopeds – making commuting cheap and fun?

The key to a better commute…? (credit)

“Ugh, my commute is killing me! Petrol costs an absolute bomb and I’m spending so much just to get to work and back!”

Xailter’s long suffering friend

After mentioning he should just bike it (until he told me it was legitimately 15 miles each way), I asked him whether he was adverse to riding a motorbike or moped to work. He said sure, but what’s the benefit of them? Well, I said, (in no particular order):

  • They are pretty cheap to buy (compared to a car)
  • VERY cheap to run
  • Have minimal maintenance
  • Insurance is cheap
  • You can skip traffic if you’re okay doing lane overtaking

And best of all, once you do a one day course called the CBT course you can ride an up to 125cc motorbike / moped which can generally do 45-50 mph. The restrictions are that you have to ride with “L” plates and cannot carry passengers and need to renew your CBT every 2 years in the UK.

“Sounds great!” he said and then off he went to look at bikes on autotrader or something.

However, an interesting question came back

“Hey Xailter, have you seen there’s electric ones as well? Are they worth looking at?”

I gave him a blank look and then told him I’d get back to him… but my interest was piqued. Are they any good…? I know all the reasons why electric cars beat the pants off most petrol cars, but does the same logic apply to motorbikes and mopeds? Could I convert another misguided soul to the electric transportation revolution?! The game was afoot!

For this post I researched some popular petrol mopeds and a couple of interesting looking electric mopeds. But I’ll just put this here in bold for all to see:

Disclaimer
1. I have not been paid by any company to pick their mopeds for comparison, I picked ones that looked comparable / interesting to me (as in I would consider either one).
2. I have passed a CBT course and did own a 50cc petrol moped for a grand total of 6 months. I am not an experienced rider, please do your own research before buying anything if you’re interested in the below!

Petrol vs. Electric Mopeds – the contestants!

Let’s have a look at the competition below and their respective attributes!

102 KGWeight115 KG
5.2L fuel tankFuel Capacity4.2 kW Lithium-ion Battery
108cc 4-stroke petrol engineEngine3000W Bosch electric motor
120 mpg (real world)Efficiency ~20 miles / kWh
137 miles (real world)Max Range70 miles (Sport)
106 miles (Eco)
9 NmMax Torque138 Nm
50 mphTop Speed46 mph
26g / mileEmissions (co2)0g / mile
£2,399Price£3,196 (with grant)
A comparison of the different attributes between a popular petrol and electric moped

I’ve picked what is apparently one of the most popular commuter petrol mopeds in 2018/19 and pitched it up against one of the most interesting electric mopeds I found in my searches. I would happily use either one if I had any use for a moped these days, but I hope you’ll agree that this should be a fairly equal match-up. I will, however, be rooting for the electric one because I really do think we need to stop burning petrol to get about. This is purely a theoretical discussion as I have not personally ridden either of these mopeds.

In short, however, the Honda has longer range and is cheaper (much like petrol cars vs. electric cars). But I have a sneaking suspicion that over the life of the moped, the electric one would come out cheaper overall. Let’s dive in and see how the costs match up.

Working out the ‘cost per mile’ for fuel

The Honda runs on good old fashioned petrol. I will be using the price of £1.29 a litre as that has been fairly consistently the price of 95 unleaded petrol in my area for months now. Adjust with your own prices below if you wish. The formula to work out cost per mile goes like so:

( Fuel tank capacity X Petrol price per litre ) / Range of vehicle

For our Honda Vision, using the values in the table above we end up with the following:

( 5.2 litres X £1.29 ) / 137 miles = £0.0489/mile or 4.9p/mile

For an electric vehicle, the formula is similar but involves your electricity rate instead:

( Battery capacity X Price per kW ) / Range of vehicle

For myself (I have a very cheap overnight rate for charging an EV), I end up with this result:

( 4.2 kW X £0.05 ) / 70 miles* = £0.003/mile or 0.3p/mile

*I’m assuming the lowest range for this calculation, highest range (106 miles) would be 0.2p/mile

You may notice that 0.3p/mile is quite a bit lower than 4.8p/mile. However, the electric moped costs an additional £797 sterling! That would buy quite a lot of petrol to fuel the normal moped. Therefore what is the cross-over point, or number of miles you would have to ride to equal the costs based on just fuel?

£797 (price difference) / ( £0.049 – £0.003 ) = ~17,326 miles

Therefore, so long as you ride at least roughly 17,000 miles during the lifetime of your ownership of the electric moped, you will at the very least break even. For comparison, my old and pretty fuel efficient Ford Fiesta 2009 achieved an average of 42mpg. The cost per mile worked out to roughly 14p/mile!

The petrol moped would be 3x cheaper to run than my old car, but the electric moped would be nearly 45x cheaper(!).

The electric moped goes in for the kill

My friend does a 30 mile commute (15 miles each way) 5 times a week and his car gets about 35mpg. This is equal to roughly 17p/mile. With some fancy maths, we can work out that his weekly commute is costing him: £25.50 a week or about £112.20 a month (assuming 22 working days a month). Let’s calculate the payback period for the above mopeds compared to his car.

VehicleVehicle Cost (£)Cost per MileMonthly Cost (£)Payback Period
Petrol Car0
(already owned)
17p112.200
(already owned)
Petrol Moped2,3994.9p32.34~30 months
Electric Moped3,1960.3p1.98 (!)~29 months
A comparison of payback periods between the mopeds and the car

It’s amazing how close the payback periods are actually – I was expecting the higher cost of the electric moped to cause it to take longer to earn its keep. But it’s dead close! Of course, after the payback period of ~30 months, the electric moped runs away from the petrol one with it’s lower ongoing costs. It’s hard to beat £2 a month of fuel costs!

A look at the more interesting features

The NIU N-GT has two 2.1 kWh removable batteries and can operate on only one! (credit)

What really caught my eye on the NIU N-GT was actually the above. Removable batteries. Whenever I read about electric vehicles on more mainstream news websites, in the comments there is the inevitable cry of “but the batteries will die in 12 months and then you’re screwed!”. Yes, lithium-ion batteries do degrade over time. But it’s not that damn fast. I do acknowledge that it’s a pain to remove batteries from electric cars and replace them (you need to take them to the garage). Well here’s a great solution where you can simply buy a couple of spares and your moped is as good as brand new!

Additionally, you can charge the moped one of two ways. You can plug it in (like the image at the top of this post) or you can remove the batteries and charge them with the supplied charger (you can charge both at once). Most electric mopeds I researched had really slow charging rates – as in they had ~30 mile range but took SIX HOURS to recharge! What the hell is with that crap charge rate?

The NIU N-GT can recharge from 0 to 90% in 3.5 hours and has over double the range. That’s a pretty big difference, so kudos to them.

Charge at home and the office?

Due to the removable batteries, this is an electric vehicle you can own if you live in a flat or don’t otherwise have access to a drive. You can also potentially charge for free at work! Remove a battery or two (they weigh 11 KG each apparently, be careful) and find an empty electrical socket (and get permission from your employer) and you’re commuting for free!

If my employer was handing out free petrol I would certainly be taking advantage of that.

And I have to add this, because I’m me, but if you have solar panels you would also be able to top up the batteries at the weekend potentially for ‘free’. Try and create your own petrol at home and see how that goes!

Miscellaneous features

The dash looks cool too! (credit)

I didn’t know where to put this other stuff, but here’s some other interesting features I liked the look of on the NIU N-GT:

  • Has an app that let’s you view stats and battery charge
  • Moped has GPS and alerts if it is moved
  • Over the air updates – just like a Tesla!
  • The batteries seem to have a slew of charging safety features
  • Regen braking – increases range by converting braking energy to the battery
  • A strong front LED light to make yourself visible
  • It has a USB port so you can charge your phone on the go!

Wrapping up

I’m honestly disappointed I don’t have a need for an electric moped. If I had a regular commute that was <40 miles and didn’t involve motorway driving, I would probably have tried to purchase one of these things already. They really have come a long way in the past few years, and as battery technology improves I think they will become ever more popular to own and ride for the commuter looking to reduce their outgoings.

Add on the fact that, in London, a moped (either of the above models) doesn’t have to pay:

And you may see why it’s time to get commuting on the moped!

Time to share this post with my friend and see what he thinks about it all.


The kettle that beats the stock market!

The one I bought is slightly more modern than this (credit)

(Don’t worry, I haven’t gone completely barmy, there is some logic behind that title.)

This is one of those things where I offhandedly thought about something and then got stuck in the rabbit hole of my own creation trying to work what the actual answer was and if it was at all relevant in the grander scheme of things. The answer to the question you don’t know yet turned out to be kinda interesting, so here I am sharing my findings with you and why I opted to go buy a new kettle.

I swear I’m sane. Bear with me.

How much does it cost to run your kettle to make a cup of tea?

It’s a surprisingly simple calculation once I google’d the right words:

(# of litres of water X temperature change X 4.2) X (electricity rate in p / 1000)

Or if you’d prefer that with some actual numbers, assume the following:

  • My old kettle had a minimum fill of 1 litre, so we use 1 here
  • Roughly, water is at room temperature of 15 degrees Celsius and we’re heating it up to boiling, otherwise known as 100 degrees Celsius
  • 4.2 is the specific heat capacity of water (how much energy you have to put into it to make its temperature increase)
  • And my electricity rate is 15p

Put it all together and you get the following:

(1 litre X (100 – 15 degrees) X 4.2) X 0.015 = 357 watts X 0.015 = 5.4p

Thank you Xailter, my life is now complete

The story doesn’t end there though. I was actually looking into whether a kettle existed that let you modify its power draw. Most kettles pull about 3000W (3kW) through the plug to boil the kettle as fast as possible. I was thinking that if I could limit the power draw to about 1000W then I could basically boil my kettle for ‘free’ from my solar panels. During winter, they don’t produce a whole lot more than that.

Turns out that is not a thing that exists.

But I did stumble upon a breed of kettles that let you change the temperature the kettle will stop heating at. I never knew this was a thing! Even better, these kettles let you boil an incredibly small amount of water as a minimum, instead of the whole 1 litre I had to boil each time which mostly got wasted! I had to experiment further.

So here’s my new kettle

A thing of beauty, no? (link to buy – I paid £54 for mine)

Why is this relevant? The main points here are:

  • You can boil a minimum of 250ml compared to my old one’s 1 litre minimum
  • You can choose the water temperature from: 70/80/90/100 degrees Celcius

Before, if I wanted a brew, I burnt through 357 watts to get the hot water I wanted to enjoy my delicious cup of tea. If instead I’m heating the bare minimum to get my hot water and I’m only heating it to the temperature I want, then the inputs to the equation change and it now looks like this:

(0.25 litres X (70 – 15 degrees) X 4.2) X 0.015 = 58 watts X 0.015 = 0.9p

Or an energy saving of 6.0x the amount of electricity! Damn, I didn’t expect it to be that good! In reality though, I’ve found coffee at 70 degrees to taste… not great, but I can’t tell much of a difference on the 80 degree setting. That is still a 5.3x saving win over the old kettle.

So you can retire tomorrow then on your savings?

No, of course not. My wife or I probably boil the kettle 5-6 times a day; we’re real tea/coffee/hot chocolate fiends. A 4p saving each time isn’t much on its own, but add it up over the lifetime of the kettle and it will basically pay for itself, assuming your old kettle was an old crap one like mine. For example, assume I boil the kettle 3 times a day for a year (not an unreasonable assumption in an average household) up to 80 degrees:

3 times a day X 365 days a year X (5.4p – 1.02p (80 degree cost)) = £47.96

My new kettle cost £54 from Argos (no idea why the price is so high now). Even if we assume you only save half the amount above (boiling 500ml instead for two people all the time), the kettle easily pays for itself in 2 years. After that you’re home free and up on the deal. Who doesn’t want an ROI (Return on Investment) of over 50%?!

Oddly the best thing is, I haven’t even changed a habit. Put water in kettle, up to the line. Put kettle on, make sure it’s set to 80 degrees. Enjoy delicious beverage. Easy. Everyone can start doing this right now and enjoy the savings and you have to change nothing in your life.

Of course, ASDA has a cheaper one (link to buy)

Oh and if the above price put you off, don’t worry. ASDA has a similar one for just £30. What are you waiting for?!

And now you know why I bought a new kettle.


The Solar House Experiment: An Overview

If I had the space, I would definitely install something this size! (credit)

I am a tech geek at heart. New graphics cards and processors? Tell me more! There’s a new version of Windows 10 coming out, tell me all the new features I can play with! There’s a new phone out that has built-in radar components and can map a room?! Awesome (if horribly impractical and battery hungry)!

My wife and I moved into our semi-detached house in 2017, selling both our flats at the time. Now while I loved my flat very much, it was missing a couple of things that bugged me. It didn’t have a roof I had sole access to, and it didn’t have a drive (it did have a parking space – a rarity in some parts of where I lived!). That meant my “super green solar” plans were never going to happen there. But now I was free of those restrictions, I had the opportunity to experiment with all that cool tech!

The key part – solar panels

None of the below would be possible without solar panels. 95% of people in the UK get their energy for their home via the national grid (electricity), gas and/or oil. You are completely at the whim of your energy supplier for whatever they charge to supply and meter you. You can move supplier (and I fully encourage you to check you’re on the best deal for yourself!) but at the end of the day, you have zero control where your energy comes from.

The reduction in cost of solar panels ($/watt) since 1977

I’ve wanted solar panels since I realised they were a thing and the price has been steadily dropping even over the past few years. I got my 3.6 kW array installed in November 2018 and therefore have over a full year’s data which I plan on sharing in a future post for this series. This post will detail the plans and achievements of The Solar House Experiment (TSHE) so far, with more detail for each component in their own post. I’ll also include the financials and maths that went into deciding whether each component was worth it or not and hopefully save you some hassle in each post!

The grand plan

The Solar House Experiment plan currently consists of the following parts:

  • Solar Panels – required to generate the “off-grid” carbon-free electricity in the first place. I was fortunate to get in before the Feed-in-Tariffs disappeared.
  • Smart Meter – required to get the best tariffs for solar batteries and EV charging at the moment.
  • Solar Diverter – these take excess solar energy from the panels and dumps it into your hot water tank, providing free hot water!
  • Electric Car – put “fuel” in your car with the excess energy off your solar panels! They are also exceptionally cheap to run on a day to day basis, but not really “part of the house” per se.
  • EV Charger – required with the electric car, in order to charge it at a rate measured shorter than “days”.
  • Solar Battery – stores excess solar generation for use when needed, such as when its dark or cloudy and the panels can’t supply the house fully. Arbitrage opportunities may be possible with selling stored electricity to grid in the future.
  • Smart Thermostat – heats the house / hot water at low carbon / low price hours.

The fantastic thing about this plan is that everything is quite modular, once you have the solar panels anyway. I’ve been slowly adding new pieces to the house system over the past year and a bit and they all work pretty effortlessly together after the software is setup correctly.

The only things I don’t have installed yet are the solar battery and the smart thermostat, but the reasons for this will be discussed in the relevant articles.

What did it cost and why on earth go to all that hassle?

Amazingly, once I researched and decided what products I wanted and got a few quotes for the installations I couldn’t do on my own, it’s only taken about a week’s worth of time to get everything installed and setup. Here’s an actual price guide for each part of the system so far:

TSHE ComponentPrice (£)Installation TimeNotes
Solar Panels,
Micro-Inverters,
Monitoring Software,
Installation
7,5662 days1. My wife and I split this cost 50/50 between us (because she’s awesome).
2. I went for top spec panels and micro-inverters due to space constraints and plans to expand the array at a later date.
Smart Meter02 hoursInstalled for free by my energy supplier: Octopus Energy.
Solar Diverter
(MyEnergi Eddi)
3652 hoursSpent an afternoon with my Dad installing this together. Pretty easy! The price appears to have increased since I bought mine though.
EV Charger
(MyEnergi Zappi)
6001 dayI had to use an OLEV approved installer to get a £500 grant from the government. You also have to have an electric car first to be eligible.
Misc. add-ons
(MyEnergi add-ons)
50 + 852 hoursThese optional extras allowed me to have internet connectivity for the EV Charger and Solar Diverter and I didn’t have to drill holes around the house to run extra cables to them.
Smart Thermostat
(Nest Thermostats)
199 / 219 + installation1 dayI have not bought or installed this, and may not ever have one.
Electric Car
(Nissan Leaf / Tesla Model 3 / Renault Zoe / etc.)
8000+1 day
(pickup)
An electric car isn’t needed for the house, but including for completeness.
Total:8,885 (no car)
16,885+ (with car)
The costs to buy and install the various parts of the solar house experiment so far

So as you can see from the above, I have a top-spec solar setup for just under £9,000. I tend to buy the more expensive models/variants of the various categories because they offer extra features I find worthwhile. For example, I fully believe you could get the same number of panels (I have 11 on my house) that produce ~15% less power for nearly two-thirds the price. The micro-inverters could also be replaced by one main inverter and you’d save about another £500 on the above – but your panels may suffer some efficiency loss – do your own research. My panels and micro-inverters carry a 25-year manufacturers warranty and are made by very reputable companies so I’m not concerned about panel failure.

There are also much cheaper EV chargers, solar diverters and smart thermostats. I bought and installed the ones I have because they can communicate with each other and provide additional features to maximise my solar usage. For example, with this setup my house will divert solar power in the following priority:

Normal Electrical Loads (Kettle/Oven) -> EV Charger (Car) -> Solar Diverter (Hot Water)

We’ll get to the elephant in the room in a later post, I promise (credit)

That means that when it’s bright and sunny outside and we’re not using anything particularly electrically heavy in the house (like boiling the kettle), the car’s battery is slowly being topped up. At max output in summer, the car could be gaining nearly 12 miles of range an hour! If the car is full or unplugged then the rest is dumped into the hot water tank, saving us money as instead of the gas boiler heating the water, the immersion heater is activated and draws as much power as there is excess solar power.

If there’s minimal load in the house, the car is full/unplugged and the hot water has reached temperature, then it is passed out to the national grid where it is hopefully off-setting someone else’s coal/gas/nuclear powered consumption.

That’s great and all… but why?!

Did you know that the UK has 40% of Europe’s wind reserves in its borders? (credit)

A few reasons, but let’s do them from most important to least:

  • Global Warming – I think this is the biggest threat to our planet, unless someone gets nuke-happy, in which case we’re screwed either way. I have the means to reduce my fossil fuel use considerably and for a pretty minimal cost. Every step we collectively take to reduce carbon emissions as whole is a win. And I don’t care what other countries are doing – do your bit if possible. I’m putting my money where my mouth is with this experiment.
  • Lower on-going costs – Having solar panels and all the fun toys will (eventually) lower my on-going day to day costs. I need to tally up all the sums first, but I’m fairly sure after Year 11 of installation the panels will have paid for themselves and every-thing after that is just gravy. I’m deferring saving the cash now for the possibility of lower costs in the future (bit like saving in a pension, no?).
  • Regain control of production – I have essentially bought ~15 years of electricity up front and the means to use it. How high do you think electricity prices will be in the next 5 / 10 / 20 years? I know my own electricity rate has jumped from 11p to 15p a kilowatt in the past 5 years. Perhaps solar panels are a good inflation hedge? Eventually they may reach the point where I will install a solar battery and be as grid-free as possible and laugh at their price increases?
  • It’s just really cool! – This is a big one for me, but it’s a purely emotional thing. When the sun is out and bright – I know I’m slowly saving money. I get to have a hot shower in the morning and it was heated and powered by sunlight. When I get in my car and drive to work, I know at least a bit of the energy I’m using came from the sun. I’m not polluting the city streets with exhaust fumes. Imagine if everyone did this, what an awesome place the UK would be! (Obligatory comic link as well)

Anyway, that’s the basics of The Solar House Experiment. In future articles (they probably won’t be sequential this time) I will dive into the details of each part of the system. Why I picked the part I did, what other alternatives there are, expected payback times, dealing with the variability of the seasons. Oh, and a big article on just how much all this stuff is saving my wife and I in our day to day lives.

Stay tuned!


You are (not) just a bunch of habits

A classic example, but not for the reasons you may think (credit)

It’s a brand new year and already the articles are flowing on how to keep up your new year’s resolution of going to the gym and getting into shape. That’s not to knock the BBC article, it actually has some rather good advice in it.

More generally though, (having moved in the last few years between couch potato, pretty fit, to injured and back to fit, then back to couch potato) is how my attitude to exercise and other tasks in my life has changed. When something was ‘easy’ for me to do, aka required little to no thinking, I did it. When I had to actively force myself to do something, I generally gave it up after a couple of weeks. And then I started researching the background on this and how it has applied to other things in my life.

The easier something is to do, the more you’ll do it

The easiest changes to make are the ones where you modify an existing habit slightly, such as turning off a light switch when you leave a room. Takes a small amount of conscious effort to remind yourself, but takes literally a second to do. You were leaving the room anyway and light switches tend to be near the door. Overall, a small change but could make a big impact if you constantly left lights on all the time (*cough* my parents *cough*).

Equally, when I lived on my own in my flat and had a regular commute, I built a set routine for when I came home of a weekday. Get in the flat, put on Insanity DVD (no subscription service back then!), get changed to workout clothes, execute. I think I threw myself an incentive of allowing myself to watch an episode or two of Game of Thrones when that was still on.

Fast forward a few years and not only are my hours all over the place and longer, I’m living out of a multitude of hotels with varying levels of gym facilities and pretty much expected to join my colleagues for nights out, least I become a social pariah. When I get back to the hotel room at 9pm after a restaurant meal (not always a healthy one mind you), my thoughts turn to bed – not a hard workout.

Those were all excuses in the past paragraph by the way, but the moment something becomes just a bit difficult, it’s amazing how fast you decide not to do something, even if it is in your benefit in the long term. So, based on what worked for me previously:

  • a set time
  • easy to start, just turn on the TV
  • someone telling me what exercises to perform
  • duration of about 30-40 minutes
  • an incentive at the end
Do not let the colourful graphics deceive you, this game will make you weep at higher difficulties

I purchased Ring Fit Adventure for my Nintendo Switch and am having a surprisingly good time from it. It’s not much of a “game” in the sense there’s not much real strategy to it, but let me tell you, losing to a final boss because you weren’t fit enough is one hell of a motivator. But it’s enjoyable and it meets my criteria above, so I have been able to keep doing this while stuck in hotel rooms for the past couple of months and my general fitness has been slowly but surely returning. I still have a long way to go of course, but any movement is better than none. I quite enjoy getting the achievements that I’ve done “xxxx squats”.

However, what works for me may not work for you. Try out different things.

This applies to anything you want to change

If you want to save more money or start writing a blog or get your body in better shape, you first need to set a goal of some description. Something achievable in a time frame that makes sense, else you’re going to get depressed you haven’t reached it. Then apply every nudge, trick and deception you can to yourself so that it becomes a habit – something you don’t even think about – you just do it.

Some tips to help you get started with your 2020 goals:

  1. Publicly announce your goalsaccountability of your actions to your friends / rivals will keep you on track. Supply a weekly update if possible.
  2. Track your progress – progress may be slow, but if you see and feel yourself getting better as time goes on (the blog post counter going up/you can run a mile 15 seconds faster) then you will feel achievement and carry on.
  3. Set reminders – my phone beeped at me yesterday to remind me to get writing and so I dedicated a couple of hours to blog writing – I am now nearly there with this post!
  4. Don’t break the routine if possible – if people insist you do something that would break your routine, then remind them you need to do this (see #1). No friend wants you to fail.
  5. Keep going – I think you need to keep going for at least 3 months to re-wire your brain – it won’t happen in a couple of weeks.
  6. Get plenty of sleep – it’s amazing how quickly I dip into ‘I can’t be arsed with this’ when I’m tired and fall back into old habits. Aim for whatever amount of hours you need to feel energised.
  7. Apply disincentives to your current habits – “driving my car to the shops costs £x each time, whereas walking costs me nothing” (and you get a free workout!) or “a double cheese extra large pizza is 3 hours on a treadmill, perhaps I’ll switch to the tuna salad”.
  8. Automate what you can – find and pay for a personal trainer, you’ll turn up. Send part of your pay cheque to a savings account you easily can’t access, you’ll save. Sell your car, you’ll have to walk everywhere (okay, that one’s a bit extreme).

I still need to ramp up my activity levels but I’m (slowly) getting to the point where I don’t wake up feeling like a beached whale with the changes in diet and exercise I do. I plan to accelerate this further and get back into weight lifting by the second half of the year (here’s my public announcement!), but that’s for a future blog post.

Once your habit is automatic, it becomes part of your life and you wonder how you ever did it any other way before.

Knowing your habits means you can change them

Milk before water is clearly the correct approach (credit)

Do you put milk in your tea before or after the hot water? How do you write out today’s date? Do you put your loo roll “hanging-over” or “hanging-under”? Do you know why you do it that way? Most habits are pretty harmless – but we do most of them with no conscious engagement from our brains. We’ve always done it that way.

How about that multiple coffee a day habit (paid for or otherwise)? That afternoon snack you look forward to? Those 2 hours of Netflix a night? Habits are powerful, be aware of when you’re on auto-pilot and that what you are doing is what you actually want to be doing.

Now if you’ll excuse me, I have to go out-squat a boss who kicked my ass last night.


The ambitions of this blog for 2020

Flinging a light into the future… wait a minute, that’s not an LED bulb… (credit)

Hello there! As we embark on the transition of the old year to the new year, I thought it would be prudent to provide a post on what the hopes, dreams and ambitions of this blog will be for the coming year of 2020. Given I only started posting a few weeks ago, the content on the blog is a little light, but I’ve completed the first series ‘Road to FIRE‘ – a short guide to getting out of debt, getting saving and starting to invest and I plan to write more such guides in the future. But I’m getting ahead of myself – what is the purpose of this blog and what on earth am I planning to do with it?

Christmas and debt

I hope your Christmas was filled with great memories, not just presents (credit)

I set myself the goal of completing the ‘Road to FIRE‘ series before the new year for a very simple reason. People in the UK get into an astounding amount of debt over Christmas. Just read the linked article to see how big the scope of this problem is. The ‘happiest time of the year’ is followed by the crushing reality of January and having to pay it all off. Some people won’t clear their credit card debt until May 2020! And that’s the ones who do actually clear the debt.

My hope is that they will stumble across my articles and maybe be intrigued enough to explore more and find additional sources that will help them out. I truly believe that if everyone in the UK was able to clear their non-mortgage debts and start saving up a 6 month cash reserve we would all be in a better place. That is the bare minimum I would hope the UK to achieve. It won’t happen overnight, but nudging even a few people on their way to this is worth me paying some pretty cheap hosting fees to WordPress.

Goals for Igniting FIRE

I am exceptionally lucky to be in the position I am. Sure, I work hard at my job, and with the relationships with friends and family, but I had an fantastic upbringing and was never near the poverty line. This gives me advantages, no doubt. I am also lucky to have been borne and developed an inquisitive mind and a hunger for knowledge. I can do maths and make an Excel spreadsheet dance. I wish to share some of those findings with you. Some you may already know, some you may never have thought about. I hope you, dear reader, can share your experiences with me as well and we can learn off each other.

My goals for the blog are:

  • First and foremost: get people to examine their financial and personal lives
  • Increase the readership and get people involved in the comments
  • Write about more personal topics and less focus on ‘do this’ guides
  • Explore sustainable living with various technology / environmental products
  • Showcase that large saving doesn’t mean small living (summary of savings post?)
  • Work out how WordPress works… bloody thing keeps eating my posts

Putting the personal in personal finance

Now that I have the ‘Road to FIRE‘ guide out of the way, I will be focusing on the topics more personal to me. I am not a ‘savings rate is all that matters’ type of person – I want some fun in the journey along the way. I have a huge list of topics, products, discussions and random trivia sitting on my hard drive, all shouting ‘pick me, pick me next!’. I don’t think I’m going to have issues with finding stuff to write about for a while.

For a small glimpse of what is coming in 2020, I’ll list some of the topics I am currently musing about (article names pending):

Don’t worry, my topics list isn’t stored on dead trees, but I imagine it like this (credit)
  • The Solar House Experiment – a new series looking at how we’re updating the house with sustainable technology and how all the synergies work together
  • Blitz Your Bills – a new series looking at the various outgoings of the UK public
  • A one year solar panel review (with real numbers!)
  • Tesla Model 3 Review – was it worth it?
  • Heat your hot water for free!
  • Quarterly updates on progress (?) – I’m still unsure whether to do a ‘numbers’ post
  • Exploring the UK electricity and gas market
  • Personal stories and how they’ve affected me through my life

Stay tuned for more

And that pretty much wraps up 2019 for me. I hope you’ve had a great year and are looking forward to 2020. See you there!


Road to FIRE #6: It’s a marathon, not a sprint

The path is long and requires dedication. How far are you willing to go? (credit)

Congratulations, you’ve reached the last post for this series of “Road to FIRE”. My goal was to complete this before the new year and it looks like I’ve just squeaked under the deadline. For this post, I am just going to cover what your longer term aims might be now that you have your savings habit setup and you’re slowly building up a Stocks & Shares ISA.

What’s next?

That’s entirely up to you. What do you want to do?

With a six month cash buffer and no debt you now have options. You may decide that you’d like to purchase a property somewhere and want to save up for a house deposit (personal aside: avoid buying in London, it’s just stupid silly levels around here). You may decide that getting a six months buffer wasn’t too bad, so why not shoot for one year of savings?

Perhaps you’ve got your eye on a new car, a luxurious holiday somewhere or you’ve decided your job sucks and you want to train in something more interesting. Set a goal, work out the path towards it and go for it! Just avoid debt and keep your cash buffer while you’re doing it.

My own goals

Without going into too much details of my own financial life (that’ll be a later post), I am aiming for the full FIRE (Financial Independence, Retire Early) experience. I may not actually “retire” per the normal definition, but rather transition to a role that I would find more interesting on a personal level than my current work life and it will probably be far less well paying. For that, I will need to carry on my savings for at least another 6 or so years. After that I’ll be focusing more on “nice-to-have” luxuries in life but honestly nothing is set in stone.

Over the next 10 years I have until I hit 40 I have a few financial milestone goals I want to achieve (in ascending order of difficulty):

  • Generate enough income from my ISA to pay bills (I actually achieved this last year)
  • Fill up my S&S ISA to the £20,000 limit each year
  • Generate enough income from my ISA to pay council tax + bills
  • Generate enough income from my ISA to pay the mortgage + CT + bills
  • Pay off the mortgage entirely
  • Load up my pension with the max yearly contribution (currently £40,000/year)

I also have a bunch of non-financial goals but that’s for another post. But as you can see, I’m trying to go nearly full tilt towards FIRE and that does involve a lot of focus on the financials. Don’t worry though, I still have fun with friends and family along the way – I do not live a deprived life of any sort!

No quick and easy solutions

I’ve been saving fairly aggressively since about 2013 but my salary was much much lower back then. In the past 4 years my salary has grown rather dramatically but my lifestyle costs have remained pretty low on the whole. Buying a house with my wife actually saved me money as instead of paying for a mortgage on a flat on my own, sharing a mortgage on a bigger house in London has worked out cheaper a month – go figure.

Based on my spreadsheets (I know of no self-respecting FI aspirant who doesn’t have one) I am roughly 40% of the way towards my goal of FI. I didn’t properly start reading and exploring what FIRE was until about 2017, so while that progress may seem slow to some, I am now laser focused on achieving it and I think that percentage number will increase by leaps and bounds over the coming years as I reduce my spending and increase my savings further.

My point is, there’s no fast way there. You need to do the work and stick it out. Sometimes you wonder if it’s worth it. Sometimes you just want to blow the whole lot on a crazy purchase just so you feel you’re getting something out of all this saving (…and that’s a future blog post too… *ahem*). I’m not even half way yet and I can tell you the amazing difference it has made at my own workplace. I do not get as stressed. Everything can be managed. I’ve developed somewhat of a reputation for being “unflappable”. That’s a nice reputation to have. I’m pretty sure my bosses don’t know it’s because if the work becomes too much I will just head off to greener pastures, but hey-ho…

A new year approaches

This savings and time graph has a hidden secret…

You know the cool thing about the above graph from my savings habit post? The curve looks exactly the same no matter what amount of money you wish to save, only the numbers on the left hand side (the scale) change. So when you have a financial goal, take a look at how much less time it will take to achieve it if you can nudge your savings rate to the right of the graph, if only a little.

I’m not a great fan of new year resolutions. If you need to do something, then just get on with it! However, it is the perfect time to reflect on the past year and look forward to what you want to achieve. How about yourself, what challenges will you set yourself next year?


Road to FIRE #5: Let’s open an investing account!

It’s just not a proper investing blog post if there’s not growing piles of money with plants on them (credit)

I hope you had an excellent Christmas! But let’s return to the task at hand.

You’ve worked out your spending. You’ve cleared your debts. You’ve got a savings buffer just in case. And you’ve read about investing and realise it will build your wealth better than any savings account currently available. The next step is to actually start investing! And I will provide step by step instructions to get you up and running. Let’s begin.

The Vanguard of your investing

Crushing competitors fees since 1975!

For this guide I will be recommending Vanguard Investor. There’s a whole load of different platforms out there, of which Monevator has done a near-complete listing with all the pros and cons of each one and their associated fees. I myself have used them for the past 2 years and have no problems with their services offered. I have a few years of ISA allowances tied up in the Vanguard platform. For new entries to investing though, they have an extremely simple fee structure:

  • 0.15% (or £1.50 per £1,000 invested) a year platform fee
  • 0.07-1%+ (or 70p-£1 per £1,000 invested) a year on each ETF you decide to invest in (more on that later)

And that’s it. No fees to buy or sell ETFs. No fees to move an account to them, or away from them. Their platform fee is one of the lowest around percentage wise and their funds cost about the same at the more expensive platforms. As always though, do your own research. But for a new starter to investing it’s hard to go wrong with them unless you want to invest in something they don’t offer – they only offer Vanguard funds. As you become more confident with investing, you could consider moving to another platform if they offer something more attractive to you – this is personal finance after all – everyone has a different plan.

The absolute most important part is to start!

An aside about ISAs

Every year, the UK government allows you to save up to £20,000 (for tax year 2019/20) in an ISA (Individual Savings Account). This benefit is absolutely incredible and frankly unmatched in any other country in the world that I’m aware of. Money put in these accounts is free from Capital Gains Tax, Dividends Tax, tax on interest from bonds / cash and, if you die, your spouse/partner can inherit the entire amount and keep all those tax sheltered benefits (since 2018)!

In short, once the money is them, pretty much everything you can have in an ISA is tax-free from this point (with some caveats, but don’t worry about this yet). There are several types of ISAs but the one we’re interested in is a ‘Stocks & Shares ISA’ which holds, you guessed it, stocks and shares. If you have already opened one in this tax year, get it filled up as much as possible – you lose the allowance if you don’t use it.

Basically, use an ISA to invest. If you’re hitting the £20,000/year limit then you are rich enough to get some financial advice on what to do next.

Opening an account

  1. Navigate to the Vanguard website and click ‘Open an Account
  2. Start an application:

  3. Open a new Stocks & Shares ISA account:

  4. Read the information carefully and make sure you are eligible for the conditions required to open an ISA account with Vanguard.
  5. Usually you would pick what you fund(s) you want to invest in on this screen but for now, just setup a cash transfer once a month. The minimum Vanguard allows is £100 a month or a £500 one-off amount. We’ll go through possible fund options later, it’s easy to change the Direct Debit.

  6. Fill out all the required personal details (including National Insurance number) and create a username and password.
  7. Setup the Direct Debit instruction for £x/month from your bank account. I would recommend setting up the execution date to be a couple of days after your pay cheque so that you aren’t tempted to spend it instead…!

And that’s about it really. You have a Vanguard ISA setup and a temporary Direct Debit taking cash from your account and putting it into your ISA where it is now tax-free for all gains you’ll make in the future. The next step is to decide what to invest in.

Picking a fund / ETF

I do not (and cannot) offer investment advice. I have to be very clear on that. Always do your own research before investing in something and if you don’t understand it, I would say keep clear of it. What I can do is tell you how I set up my wife’s ISA. She has no interest in investing despite my (exciting, entertaining and well thought out*) discussions with her so she just wanted something she could chuck some money into every month and then forget about.

* Well I think they are – my wife might disagree

In terms of ‘fire and forget’ products that Vanguard offer – the most prominent are their LifeStrategy funds:

The full list of Vanguard LifeStrategy funds offered in the UK (credit)

These funds are basically Vanguard’s interpretation of a global tracker index with a mix of bonds (fixed income) and equities (shares). You should dive into the excellent information packs provided with each one (click on the links on that page) to see what they consist of. On the whole they are well diversified across a number of countries and companies. The nice thing about these funds is that they re-balance as they go along, meaning if shares suddenly rocketed 100%, Vanguard would take those winners and move them into bonds to keep the bonds/equities percentage split. My more manual approach means I probably tinker too much with my portfolio.

The biggest choice to make with these funds is how much risk can you handle? Vanguard has a nice article on determining which one may be suitable for you. Equities can offer higher returns than bonds, but also carry far more volatility. How would you feel if the value of your portfolio dropped 30% tomorrow? Perhaps a 40/60 or 60/40 portfolio would allow you to invest with confidence starting out?

Seeing as my wife is young and has no need for her invested money for the foreseeable future, she chose to invest in the 80% equities version but do check your risk tolerance with some online tools. Her Direct Debit tops up her Vanguard account just after she gets paid and it gets invested into the LifeStrategy fund and therefore the stock and bonds markets. Once it’s setup, it really is that simple! And then it’s on automatic and a new habit is formed!

I hope you can see that it’s extremely easy and even fun to get into investing! Give it a go before this year’s ISA allowance disappears on 5th April 2020! And I’ll see you in the next post where we discuss the longer term plan of FIRE.


Road to FIRE #4: Starting to invest

This could be your own story, if you’re willing to take a risk (credit)

Investing?! Are you insane?! That’s just gambling on the stock market!

Mentioning stocks and shares to my friends

Investing is a bit of an odd subject sometimes, depending on what group of friends I’m with. My colleagues at work (I work in the IT industry) seem to know what they are and are vaguely aware that their pensions are probably invested in some ‘funds’ or something and they’ll need them to grow a bit over time for their retirements.

My friends from back home (most don’t work in a ‘professional’ industry and are younger on average, but I am generalising here) seem to know that one guy who bought Facebook shares and made a mint when they went up but otherwise consider them the equivalent of heading to the casino and picking your favourite number on the roulette wheel. If it turns up, wahey! If it doesn’t, well, no biggie. More often than not though, it’s met with disinterest and considered something they can’t be bothered with.

Two quite different attitudes and yet somehow both completely wrong. Hmm.

What are stocks & shares?

There is actually a distinction between a stock and a share, but for this post I’m going to refer to them inter-changeably for simplicity. If you want to learn more, here’s a good resource on the difference. But in its simplest form, when you buy a share, you are buying a small (sometimes very small) piece of a company. That share can be bought and sold at will for whatever value someone is willing to sell it to you or buy it off you.

That share also entitles you to receive a dividend from a share (though not all companies return dividends to their shareholders). Dividends are payments from the company you have invested in, sort of as a ‘thank you’ for loaning them your money. These can be paid quarterly, bi-yearly or yearly. Dividends are generally paid out by well established companies, such as all the brand names you’ve probably heard of. While you could try and guess which shares in various companies are going to increase the most, there’s a much better and statistically (on average) more consistent way to buy shares: funds.

Funds & ETFs (Exchange Traded Funds)

A fund (and ETFs which are also funds) is simply a collection of company shares but instead of buying individual shares in each company, you purchase the fund instead. Buying £100 of Fund A would essentially allow you to buy several small pieces of company B, C, D & E which are included in that fund. This is know as diversification or as I put it – ‘not putting all your eggs in one basket’.

You may think Company X is the hot new thing you’ve been hearing about from your friends, but dumping all your money into one stock and crossing your fingers is just large-scale betting. And the odds are not on your side. It is better to have a small number of shares in each of a wide range of companies in various industries.

Taken to it’s logical conclusion – what if you had a small amount of shares in all the major top companies from around the world? Congratulations, you’ve just discovered one of the simplest and easiest ways to get started in investing and benefit from the world’s companies delivering ever better productivity and profits and paying you for the privilege.

Index Trackers

Buying a bunch of companies is far easier than you think (credit)

Simply put, they track an index. What’s an index? For example the FTSE 100 is an index which contains the top 100 UK publicly listed companies. In the U.S. the S&P 500 is an index of the 500 largest U.S. publicly traded companies. If you buy an ETF (a fund) which tracks the FTSE 100 then you are purchasing a small part off those 100 UK companies. When the UK economy is doing well, the share prices of these companies tends to rise and you benefit from this. And who cares if oil companies are having a rough time (BP, Shell) when you have all the other companies chugging along just fine. Diversification is good.

As these are well established companies you will also generally get paid dividends from the index tracker fund. Usually nothing incredible, but the FTSE 100 is currently yielding over 4.5%(!) if you look at the Vanguard FTSE 100 index tracker. That’s better than what you’d get in your savings account.

No guarantees

However, you must always bear in mind the phrase: “Remember that the value of investments can go down as well as up and you may get back less than you invest “. In the short term it is entirely possible you could lose half your money if there is a severe recession… like the one in 2008. The good news is these recessions don’t tend to last more than a couple of years on average and eventually your shares should bounce back.

But this is why investing has to be a long term game. You do not put money you may need in the next 5-10 years in the stock market. This is why you’ve built up your emergency 6 month buffer fund first. Being forced to sell your funds when they have dropped in value is how you lose money in the stock market. Do. Not. Sell.

Assume money you have invested is unavailable for the next decade. The rewards can be high, certainly better than stuffing money under the mattress, most likely better than a savings account, but you have to be prepared to take a risk to get anywhere in life. The stock markets around the world, on average, will increase over time faster than most other easily available options (cash / bonds / gold / property). The FTSE All-Share has returned on average 9.9% a year over the past 30 years. It is not a straight journey up though, there have been bumps along the way.

The returns of the FTSE All-Share over the last 30 years (credit)

If you’re still willing to take the risks to get ahead, then I’ll show you just how easy it is to get started in investing in the next post!